Lagging Behind: Healthcare Information Technology

As is painfully clear and obvious there are many aspects of the United States healthcare system that need reform, but at what is arguably the very heart of the issue is a need for better health information technology (HIT). At a panel sponsored by Health Affairs, Sam Nussbaum, the executive Vice President and Chief Medical Officer of WellPoint, Inc., set forth the “architecture” for healthcare innovation. At its base was health information.

Nussbaum’s organization is the largest for-profit, managed care provider in the Blue Cross and Blue Shield association, so this insight is coming from the heart of the industry. Yet while there has been a strong focus on improving HIT since the early 2000s, there is much work to be done.

This week the Institute of Medicine (IOM), which has been a leading advocate for advanced HIT, recommended making more efficient use of HIT as part of a multipronged approach to lowering costs and improving care. In its report, entitled “Best Care at Lower Cost: The Path To Continuously Learning Health Care in America,” the IOM found that 20% of patients reported that test results or medical records were not transferred from one place to another in time for an appointment and that 25% of patients said their healthcare provider had to reorder tests in order to make an accurate diagnosis.

On their face these numbers are terrible, but when compared to other industries the picture is even worse. The report compares the healthcare industry to the banking industry, where technology enables online banking customers to view their entire financial history and conduct transactions with the click of a button. Yet if banking functioned like healthcare, simple ATM transactions that typically take seconds would take days or longer due to unavailable or misplaced records.

These inefficiencies not only cost money, they lower the quality of care for patients; however, HIT represents an incredible opportunity to control costs while improving care. The RAND Corporation found that if HIT was widely adopted potential efficiency savings could amount to $77 billion dollars as a result of reduced hospital stays due to better scheduling, coordination, and safety; reduced nurses’ administrative time; and more efficient drug utilization. In terms of safety, analysis found that around 200,000 adverse drug events could be eliminated, leading to potential savings of $1 billion. HIT can also help with disease prevention and chronic-disease management.

Despite these potentially enormous benefits, the IOM reports that as of 2011 only 34% of office-based physicians and 18% of hospitals used a basic health electronic record system. Naturally, the question is why this is the case.

At the top of the list is cost. Forbes reports that despite the fact that these technologies can be subsidized to up to 85% cost, they still cost thousands of dollars in addition to monthly expenses. Furthermore, although these technologies benefit patients, who receive better care, and payors, who face lower costs, providers’ bottom lines take a hit at the initial purchase and in the form of lower revenue. For instance, the RAND Corporation points out that reducing drug adverse events reduces the number of bed-days, thus decreasing hospital revenue.

Relatedly, the central focus of much HIT development has followed the traditional healthcare reimbursement model– that is focusing on quantity over quality. As Forbes notes, though these technologies could stand to benefit patients immensely and give them a more interactive role in their care, in point of fact patients are merely used as “vessels for billing codes.”

As a result, these technologies are unpopular with the physicians who use them, so those with a choice elect not to use HIT. This is understandable, but it serves as a barrier to innovation and reform.

Given that higher and higher levels of integration are being seen in healthcare, easily accessible and accurate information is more important than ever. HIT stands as the best vessel to make this possible, but in order for this to happen HIT must be developed to be more user friendly, more connected, and more innovative. If a banker in New York City can make investments in China while sitting at his desk, then there is no reason why a physician cannot access the records of a patient standing right in front her.